In 2018, the Financial Supervisory Service (the “FSS”), Korea’s financial watchdog, imposed sanctions on a former CFO of an insurance company (the “Plaintiff”) on the ground that he had violated applicable actuary and accounting regulations. However, the Plaintiff did not accept the FSS sanctions and filed an administrative lawsuit with the Seoul Administration Court to seek revocation of the sanctions. As counsel for the Plaintiff, Kim & Chang handled the litigation and successfully obtained a court ruling that revoked FSS sanctions.
This case is very meaningful because it is rare that a court would reverse such FSS sanctions. As the financial watchdog in Korea, the FSS has an extensive authority to sanction financial companies and their executives and employees. FSS sanctions rarely get revoked by a court. However, we identified the legal flaws in the FSS sanctions in question through extensive fact-finding on the role and responsibility of the Plaintiff and in-depth analysis on the actuary and accounting principles. We were able to prove, not only at the trial court (i.e., Seoul Administrative Court) but also at the appellate court (i.e., Seoul High Court) and the Korean Supreme Court that the FSS sanctions were imposed without a reasonable ground. The case came to a closure when the Supreme Court ruled in the Plaintiff’s favor on February 2021.